You have survived up to six months of stress, negotiations, and time-consuming work to acquire the business. It feels like you have run a marathon or the gauntlet. You close the deal and on day one you step in and you are the new business owner. Now what? The stress starts all over again. This is why it is important that new owner steps into the business with a plan intact. That plan changes from business to business and situation to situation in these transactions because no two business acquisitions are alike however you must have a plan What things need to be considered when making this general plan?
When you make a plan as a new owner for the first three months (or first 90 days) it is important to appreciate and consider the size of business that you have acquired before you start making an elaborate plan. If you have acquired a big business you are likely to have a management team in place and the transition can be smooth. In an ongoing business that’s successful the transition requirements can be quite simple as opposed to a turnaround business that requirements significant help. You change the leader (business owner) at the top and the business will keep running whether you show up at eight o’clock or ten o’clock that morning. If you have a good transition plan in a larger business, you can make a more thoughtful transition plan over 90 days. In the case of a small business, you are now the hands-on general manager and business owner and will need to be there to put out fires on your first day. Certainly if you’re putting out fires every day, your elaborate plan will fall apart and daily tasks challenge your ability to execute change.
Consider the Culture
What are the things that you want to do when you set foot in the door? One thing I always advise a new owner to do is consider the culture and the type of transition that the outgoing owners have. If the culture is very rigid, then you just understand that. If it’s a very loose culture you also have to understand that. Your plans have to be implemented with respect to who your new employees are and to how the outgoing owners act.
Make it Fresh & New
Generally speaking, one of the first things that any buyer would do on their first day is create a little bit of a plan to clean up the building and the business. Make sure all the offices are clean, organized, and fresh because this gives the employees and customers a fresh start and a sense of renewed passion. It is likely that the employees wanted it to be cleaned up and renewed. Adding some fresh life to the business is often a welcome change for employees. It also helps the new owner to feel good about the place immediately and to get into the nooks and crannies of the business by understanding what they are dealing with. Simply put, it’s like cleaning things the way you would your house before guests came over for a party.
Get One-On-One with Employees
The second task is to walk around to different departments. Understand what they do every day, who does it, and what the outcome of an end-of-day workday is for each of the employees in those departments. This develops a rapport with each of the employees by understanding what a day in the life of that employee looks like. It also helps the employee understand a little more about you and gives them a chance to communicate with you on a one-to-one level. It is important to listen to the employee when they talk to you; having some one-to-one time by going department by department (employee by employee) is really important for building business culture. I encourage business owners to write down everything that comes to mind in those department by department discussions. This task will immediately educate you and help illicit new ideas for running the business different, or better, and give you some ideas for changes you want to make.
Jarrett Davidson is an experienced entrepreneur and corporate finance professional with significant strategic and operational roles within companies he owns and advises on.